Economic Implications of Improved Schooling Ei Eric A. Hanushek Hoover Institution Stanford University Congressional Briefing U.S. Capitol January 2012
Conclusions U.S. scores on international assessments portend bleak future - Not a few bad states - Not a difficult to educate population Very different futures for United States Current recession costs dwarfed by schooling crisis Easy to ignore, hard to recover
600 500 400 300 200 100 0 International Math Rankings PISA 2009 PISA Math Performance 2009 Shanghai- Hong United Dubai T rinidad Albaniaa Tunisia aa Indonesia Qatar Peru Panam a Kyrgyzstan Singapore - Kong Korea Chinese ed Finland Liechtensteinn Switzerland Japan na Canada Netherlands a Macao-Chin New Belgium ma Australia Germany Estonia Iceland k Denmar Slovenia Norway France ek Slovak Austria Poland Sweden Czech hd United Hungary Luxembourg States Ireland Portugal Spain Latvia Italy Lithuaniaa Russian ne Greece Croatiaa (UAE) Israel Turkey Serbia Azerbaijan Bulgaria aa Romani Uruguay Chile Thailand Mexico and Kazakhstan Montenegroo Argentina Jordan nil Braz Colombia
Cognitive Skills and Economic Growth
100 75 50 25 0 Secondary School Completion Secondary School Completion Rates Ireland Japan Finland Korea Greece Norway United Kingdom Switz itzerland Israel Iceland Czech Republic Slovenia Italy EU19 a average Denmark Poland Slovak Republic OECD Daverage Hungary New wzealand United States Sweden Canada Spain Luxem embourg Chile Portugal Mexico Turkey Germany Ge Percent
Years of Schooling and Economic Growth With quality control Without quality control
Projections of Value of Improved Schooling Assume future looks like past Improve schools over 20 years Calculate added GDP based on history Discount future over lifetime of somebody born today
Scenario 1 Growth Projections - Achievement improves by 25 points (1/4 s.d.)
60% Annual Gains from 25 PISA-Points Improvement (1/4 std. dev.) 50% ition to annual GDP Percent addi 40% 30% 20% 10% 0% 2010 00 2020 00 2030 2040 00 2050 2060 2070 2080 2090 2100 2110 Year
Scenario 1 Growth Projections - Achievement improves by 25 points (1/4 s.d.) - PV = 288% of current GDP - $44 trillion for United States
Growth Projections Scenario 1 - Achievement improves by 25 points (1/4 s.d.) Scenario 2 - U.S. achieves at level l of Finland - PV = 737% of current GDP in United States - $112 trillion for United States
Growth Projections Scenario 1 - Achievement improves by 25 points (1/4 s.d.) Scenario 2 - U.S. achieves at level l of Finland Scenario 3 - All students to 400 points (basic skills) [19% in U.S.] - PV = 567% of current GDP in United States - $86 trillion for United States
Math League Tables -- 2009 32% proficient in U.S. (NAEP standard) - 32 nd out of 65 countries
Proficient in Math PISA 2009
Math League Tables -- 2009 32% proficient in U.S. (NAEP standard) - 32 nd out of 65 countries Massachusetts significantly outperformed by 6 Minnesota significantly outperformed by 11
California competes with...
California competes with...
Math League Tables -- 2009 32% proficient in U.S. (NAEP standard) - 32 nd out of 65 countries Massachusetts significantly outperformed by 6 Minnesota significantly outperformed by 11 California significantly outperformed by 36
Observations Not U.S. having especially difficult to educate White students
White Students in US vs All Internationally
Observations Not U.S. having especially difficult to educate White students - 42% proficient; 17 th in comparison to all in other countries College educated parents
Students in US with College Educated Parent vs All Internationally
Observations Not U.S. having especially difficult to educate White students - 42% proficient; 17 th in comparison to all in other countries College educated parents - 44% proficient; 16 th in comparison to all in other countries
First in the World by 2000 pe ercent additions to GDP 40% 30% 20% 10% Success by 2000 Success by 2010 Total K-12 spending 0% 1989 1994 1999 2004 2009 2014 2019 2024 2029 2034 2039 2044 2049 2054 2059 2064 year 10-year reform 20-year reform Total U.S. K-12 spending
Conclusions U.S. scores on international assessments portend bleak future - Not a few bad states - Not a difficult to educate population Very different futures for United States Current recession costs dwarfed by schooling crisis Easy to ignore, hard to recover